Where the company is a member of one or more 51% groups, the threshold of £20m will be divided by the number of related 51% group companies plus 1one. For example, if a company has three related 51% group companies, the threshold is £5m (£20m/(1+3)).

This is the same way in which the threshold of £1.5m for entering the instalment payment regime is apportioned. A company is a related 51% company of another if either company is a 51% subsidiary of the other, or both are 51% subsidiaries of a third company.

According to HMRC’s impact summary, it expects to spend £35m in 2017-18, and £30m in 2018-19 before the measure is introduced. It expects the move to make £15m in 2019-20 and £10m in 2020-21.

Additionally, HMRC estimates the additional costs for implementing the change are estimated at £1.625m for IT work.

Currently, companies with annual taxable profits of over £1.5m (or, if a member of one or more 51% groups, a proportion of this amount) pay corporation tax in instalments. For an accounting period of 12 months, companies are currently required to make payments in months seven and 10 for the accounting period to which the liability relates, and months one and four of the next accounting period. Companies with taxable profits of £1.5m or less will pay corporation tax nine months and a day after the end of the accounting period.

Read the information and impact note here.